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SUMMARY
Product overview In the midst of uncertainty about future mobile services, messaging hasproved to be the industry's great non-voice success story and has increasedrevenues for many operators around the globe. This report identifies substantialfurther opportunities to increase revenues from mobile messaging services,including SMS, MMS, mobile instant messaging and email. It also demonstratesthat these messaging services represent a highly profitable use for anoperator's network compared with voice telephony, for example. By examiningcurrent pricing, network usage and end-user perception of value, the reportprovides recommendations for the future positioning and pricing of mobilemessaging services. With operators increasingly focusing on picture messaging, the report showsthat there are still major opportunities in basic text messaging that must notbe neglected. The global volume of SMS messages is likely to increase by around50% before the end of 2005 and the report presents case studies of real servicesdemonstrating a multitude of applications beyond simple person-to-personmessaging in the youth market. MMS is in its infancy in many markets and the report identifies barriers thatmay prevent its rapid take-up and practical steps which can be taken toalleviate these. The report assesses the success of the Vodafone live! Service,which encourages take-up of MMS-capable handsets by bundling picture messagingwith a number of other non-voice services. The widespread introduction of GPRS within the GSM community enables avariety of attractive new instant messaging and email services, which presentmajor opportunities and threats. The report presents analysis of GPRS pricingwhich reveals that mobile instant messaging and email services will besubstantially cheaper than SMS in many cases. It recommends critical actions toavoid SMS revenue cannibalisation by cheaper services offered by operatorsthemselves or by third parties. Where Next for Mobile Messaging? Driving revenues profitably andcontrolling cannibalisation answers your key questions: - How will mobile messaging evolve?
- What revenues and usage levels are forecast globally and across WesternEurope for each messaging type?
- How important are new advanced messaging types, such as MMS, compared to SMS?
- What tangible actions can I take to increase messaging revenues?
- How should messaging be promoted and priced?
- How do I avoid cannibalisation of existing revenues?
Who should read this report? - Mobile operators: to identify practical and profitable ways to increase ARPUand avoid cannibalising existing text messaging revenues.
- Third parties with an interest in mobile messaging e.g. content providers,broadcasters, mobile messaging brokers: to identify the key opportunities inmobile messaging, and the role they can play in driving these.
- Equipment vendors: to understand the market evolution of mobile messagingacross Western Europe and globally, to identify and quantify the substantialfuture opportunities for products and services.
- Analysts: to understand how the mobile messaging market will evolve acrossEurope and globally.
TABLE OF CONTENTS
Summary of contents 0 Summary 1 Messaging is key to driving service profitability - 1.1 Big differences in the success of messaging services highlight revenuegrowth opportunities worldwide
- 1.2 Consideration of network use informs optimal messaging strategies
- 1.3 The promise of high margins from text messaging depends on correctpricing
- 1.4 Driving forward with mobile messaging will have immediate andlonger-term benefits
2 Text messaging still has massive growth potential - 2.1 Opportunities to drive further growth of text messaging can be ranked inorder of priority
- 2.2 Three general enablers will boost the growth of text messaging
3 Barriers to major take-up of picture messaging must be overcome - 3.1 MMS will grow more slowly in Europe than picture messaging in Japan
- 3.2 Significant MMS price premiums over SMS will hamper MMS take-up
- 3.3 Players can learn from SMS how to overcome short-term weaknesses in MMS
- 3.4 Packaging MMS with other advanced services will help drive advancedterminals and services into the market
4 Operators must be more decisive about mobile instant messaging andmobile email - 4.1 Pricing of small messages must guard against uncontrolledcannibalisation of SMS revenues
- 4.2 Mobile instant messaging and email services require improved usabilityand receptive user groups
5 Global mobile messaging revenue could peak at USD69.1 billion in 2007 - 5.1 SMS in Western Europe could continue to grow until 2006
- 5.2 Mobile instant messaging and email will be of greater significance onthe global scale
Figures and tables - Figure 0.1: Forecast SMS, MMS, mobile instant messaging and mobile emailrevenue globally, 2002-8
- Figure 0.2: Forecast number of SMS, MMS, mobile instant messages and mobileemails globally, 2002-8
- Figure 1.1: Annual non-voice ARPUs of selected major operators worldwide
- Table 1.1: Different levels of network usage for different services
- Figure 1.2: Revenue per Mbyte for typical services
- Figure 1.3: Comparison of gross revenue per Mbyte and net revenue per Mbytefor Vodafone live! Services
- Figure 1.4: Number of SMS messages sent per month per customer of UKoperators
- Figure 1.5: Annualised SMS revenue per customer of UK operators
- Figure 1.6: Total annualised SMS revenue of UK operators
- Figure 1.7: Average revenue per SMS message of UK operators
- Figure 1.8: Average annual spend per I-Mode customer on services in Japan
- Figure 2.1: The impact and difficulty of opportunities to drive growth oftext messaging
- Figure 2.2: Usage of TV, radio, home Internet and mobile phone per personper day in the USA and UK
- Table 2.1: Advantages and disadvantages of WAP, SMS and audio delivery ofservices
- Figure 3.1: Historical growth of picture messaging in Japan, 2001-3
- Figure 3.2: Examples of pricing for sending text messages (SMS/mobile email)and picture messages (MMS/picture mail)
- Figure 3.3: Gross revenue per Mbyte achieved by voice, text messaging andpicture messaging
- Table 3.1: Comparison of SMS enablers and MMS barriers
- Figure 3.4: Growth curve of Vodafone live! Compared with historical growthrates of Japan's I-Mode and J-Sky
- Figure 4.1: Typical cost to end-user of low-volume GPRS usage
- Table 4.1: Vodafone live! Service pricing
- Table 5.1: Scenarios for the evolution of mobile messaging
- Figure 5.1: Forecast SMS, MMS, mobile instant messaging and mobile emailrevenue in Western Europe, 2002-8
- Figure 5.2: Forecast number of SMS, MMS, mobile instant messages and mobileemails in Western Europe, 2002-8
- Figure 5.3: Forecast SMS, MMS, mobile instant messaging and mobile emailrevenue globally, 2002-8
- Figure 5.4: Forecast number of SMS, MMS, mobile instant messages and mobileemails globally, 2002-8
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